Meet your buyer before you buy

Before buying off-plan, I want to know who is likely to buy the completed property from me. The answer helps test the layout, price, rental case and supply around handover.

A homebuyer and a landlord value different things

A homebuyer will examine storage, bedroom sizes, the kitchen, access, the view and service charges. They may also need the property to support a mortgage valuation. The original launch price tells them little about how well the home will suit them.

A landlord starts with income. If an apartment can rent for AED 84,000 a year, its gross yield changes with the purchase price:

• AED 1.20 million: 7.0%.
• AED 1.40 million: 6.0%.
• AED 1.50 million: 5.6%.

For a buyer seeking 7% gross yield, that rent supports approximately AED 1.20 million. A higher price requires more rent or acceptance of a lower yield.

Know what your buyer can choose instead

At handover, the developer may still have inventory or a newer phase with easier payment terms. Nearby buildings may offer immediate rent, lower service charges or better layouts. Your unit needs a reason for someone to choose it.

Include the costs

In the original example, an AED 1.20 million purchase plus a 4% registration fee costs AED 1,248,000 before other charges. With assumed selling costs of 2.5%, a resale around AED 1.28 million is needed simply to recover those amounts. Finance, furnishing, administration and other costs would raise the hurdle.

The ten-point exit check

Give two points to each item you can support with evidence:

• A clearly identified future buyer.
• A resale price supported by comparable properties.
• Rent that supports the proposed valuation.
• An understanding of competing supply.
• A clear advantage in the unit itself.

The original framework treats 8–10 as strong exit logic, 5–7 as requiring careful pricing and below 5 as greater dependence on appreciation. It is a discussion tool, not a guarantee.

Before booking, explain who would buy the completed property, why and at what realistic price.

RadheyShyamRealtor.com

Real People. Real Advice. Real Estate.